Six months into the Ukraine conflict, the ArcelorMittal steel plant is emblematic of Moscow’s efforts to choke off its neighbour’s economy.
in the first days of the war, their columns of armoured cars advancing within kilometres of its sprawling Soviet-era steel plant, once coveted by Nazis and oligarchs and, now, Vladimir Putin.
“This is a carefully devised plan,” says Alexander Rodnyansky, an economic adviser to Ukraine’s President Volodymyr Zelensky. “Ever since its blitzkrieg failed, Russia has moved to the strategy of the slow, painful death by economic means.”It appears to be working. Ukraine’s gross domestic product will fall by as much as half this year.
An excavator loads iron ore onto a dump truck at the open pit mine, operated by ArcelorMittal, in Kryvyi Rih.It had planned to spend another $US2.5 billion, says the plant’s chief executive Mauro Longobardo. “We were seeing Ukraine moving towards Europe and needed to prepare the facility to be a European facility,” he says.
But the fate of the plant had already been decided far away from Kryvyi Rih. In the north, the Ukrainian military had blown up the railway lines from Russia, which normally brought in the coal that heats the furnaces to more than 1500C. In the south, Russian gunships formed an offshore blockade after the Ukrainians laid down sea mines at the port of Odesa to ward off amphibious assaults.
Now, Longobardo keeps the single blast furnace running, mostly for local Ukrainian customers, and is waiting either for global prices to recover or the Black Sea blockade to lift. If neither happens, he will have to shut that down too. As for the 26,000 employees still on the payroll, he says the company’s support “can’t be eternal”.
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